The twin-balance sheet problem of stressed loans and overleveraged corporates is well behind and the coming decade will see an upsurge in capital expenditure across many sectors, wrote Kumar Mangalam Birla.
“I believe, we have upon us a forthcoming decade of Capex Mahotsav in India,” Birla wrote on a note on LinkedIn that was titled “My Reflection 2021-2022”
Birlas aid that in India, a generation of entrepreneurs are now taking advantage of economic reforms as profound as those in 1991.
1991 is the year when some of the important policy initiatives were introduced in the budget for correcting the fiscal imbalance, like reduction in fertiliser subsidy, abolition of subsidy on sugar, disinvestment of a part of the government's equity holdings in select public sector undertakings.
“The private sector is also firing on two-engines, the conventional and the new economy. I call it the double-engine growth,” Birla s aid.
Investors are excited about growth prospects in core sectors as well as sunrise sectors… the word sunrise sector applies to the entire landscape in India, which includes both conventional sectors like cement, steel, power and auto and emerging areas like digital and renewables, Birla said.
Whiplash effects have come into force, with shortages in humble $1 semiconductors in Taiwan, and a fire in a lithography factory in Berlin, lengthening the queues for eager buyers of new cars in India, he said.
“In messages reminiscent of the licence era, hopeful car aspirants are now being put in long waiting lists as companies scramble to crank up production,” Birla said, adding that these whiplash effects have called into question a decades long shift towards increasing efficiency and finely tuned precision operations that optimised operating costs but took away room for margins of error.
Birla said that the world is filled with capital and is the best time to be an entrepreneur.